Kimberly-Clark shares drop on weaker outlook

MattAndrejczak

SAN FRANCISCO (MarketWatch) -- Kimberly-Clark
KMB, +0.24%
shares fell 4% to $70.14 early Monday after the Huggies diaper and Kleenex tissue maker cut its sales outlook and lowered the high-end of its 2011 profit forecast. The stock was the second worst decliner on the S&P 500. Kimberly-Clark said retailers reduced diaper inventory and consumers traded down to cheaper diapers during the June to September period. The consumer company raised Huggies prices earlier this year to combat rising raw material costs. During the quarter, Kimberly-Clark said demand for its Kleenex tissues also fell. The company's gross margin fell to 29.5% of sales from 32.4%. For the year, Kimberly-Clark shares are up 11%. The stock has been supported by its an annual dividend of $2.80 a share for a 4% yield.

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